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La Niña-like extended weather outlook... The extended weather outlook from the U.S. Climate Prediction Center (CPC) calls for increased chances of above-normal temperatures across most of the U.S. aside from far northern areas west of the Great Lakes, where there are “equal chances for above-, below- and normal temps. Below-normal precipitation is also expected from the southwestern Plains through the Southeast, while small pockets of above-normal precip are likely over the Pacific Northwest and far northern Great Lakes region. There are “equal chances” for precip across the remainder of the United States.
ENSO-neutral conditions remain in place, but CPC signals there are 60% odds a weak La Niña event will develop by the end of November and persist through winter before neutral conditions are likely to return. A weaker La Niña implies it would be less likely to result in conventional winter impacts, though predictable signals could still influence the forecast guidance, which is the case with the extended outlook.
The Seasonal Drought Outlook calls for drought to develop or persist over most HRW areas (aside from Montana) and across southern SRW locations through January. Drought is expected to improve or be removed over most northern SRW areas.
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Drought covers more than half of U.S. winter wheat areas, expected to expand... As of Oct. 15, the Drought Monitor showed 78% of the U.S. was covered by abnormal dryness/drought, up three percentage points from the previous week. USDA estimated 52% of the U.S. winter wheat crop was experiencing drought conditions, up five points from last week. Drought continued to spread across HRW areas, while conditions also worsened in most SRW states.
In HRW areas, dryness/drought covered 97% of Kansas (1% D3, no D4), 70% of Colorado (2% D3, no D4), 86% of Oklahoma (31% D3, no D4), 86% of Texas (12% D3 or D4), 100% of Nebraska (virtually no D3, no D4), 100% of South Dakota (5% D3, no D4) and 84% of Montana (13% D3 or D4).
In SRW areas, dryness/drought covered 77% of Missouri (5% D3, no D4), 69% of Illinois (no D3 or D4), 96% of Indiana (no D3 or D4), 82% of Ohio (20% D3 or D4), 99% of Michigan (virtually no D3, no D4), 4% of Kentucky (no D3 or D4) and 57% of Tennessee (virtually no D3, no D4).
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IGC raises global soybean production, keeps corn and wheat crop forecasts unchanged... The International Grains Council (IGC) raised its 2024-25 global soybean production forecast by 2 MMT to a record 421 MMT, up 26 MMT (6.6%) from last year.
IGC kept 2024-25 world corn production at 1.224 billion MT and the wheat crop 798 MMT. Corn production is expected to decline 5 MMT (0.4%) from last year, while wheat output is forecast to rise 3 MMT (0.4%).
IMF: Global trade has slowed but not in reverse... The International Monetary Fund (IMF) warned that wars, trade tensions, high debt and low growth threaten to prolong a lackluster economic era and leave nations without the resources to reduce poverty and confront climate change. At the same time, national security concerns are driving some of the world’s major economies to pursue domestically focused industrial and protectionist policies.
IMF Managing Director Kristalina Georgieva said global trade is no longer the engine of growth that it once was but was still growing. “Trade has slowed down, but has not gone into reverse,” Georgieva said ahead of IMF and World Bank annual meetings next week.
Despite the warnings, Georgieva noted central banks have successfully wrangled inflation, supply-chain constraints have eased and food and energy prices have moderated. Labor markets in both the U.S. and European Union are cooling in an orderly fashion, she said, calling all of that “a big achievement.”
Australia benefits from reduced U.S. beef production, exports... Reduced U.S. beef production and exports amid the smallest herd since the mid-1900s has opened the door for Australia to ship record amounts, including an increase to America. Australia’s beef shipments to the U.S. rocketed from an average of 11,000 metric tons (MT) a month in 2022 to nearly 40,000 MT in August. Australia’s share of U.S. beef imports has risen from 12% in 2022 to 22% in the first eight months of this year.
Australia’s beef exports to Asia’s biggest importers, Japan, China and South Korea, have also increased as U.S. shipments declined. Australia’s market share has grown from 38% in 2022 to 47% this year in Japan and from 35% to 45% in South Korea, while the U.S. share fell from 40% to 34% in Japan and 55% to 48% in South Korea.
In China, where Brazil and Argentina are the biggest suppliers of beef, Australia’s share has risen from 7% to 8% while the U.S. share slipped from 7% to 5%.
Meat & Livestock Australia predicts Australia’s beef exports will rise to a record 1.36 MMT this year and 1.37 MMT in 2025 before dipping in 2026.
ECB makes third rate cut, eyes more easing... The European Central Bank (ECB) cut interest rates for the third time this year, saying inflation in the euro zone was increasingly under control while the outlook for the bloc’s economy was worsening. The key deposit rate was cut 25 basis points to 3.25%.
“We believe the disinflationary process is well on track and all the information we received in the last five weeks were heading in the same direction - lower,” ECB President Christine Lagarde said. However, she said a recession isn’t likely, noting ECB officials are still expecting a soft landing.
Lagarde did not provide hints about future moves but four sources close to the matter told Reuters a fourth cut in December is likely unless economic or inflation data turns around in the coming weeks.
FTC probing Deere for anticompetitive practices on equipment repair... The Federal Trade Commission (FTC) is investigating Deere & Co. on whether its agricultural equipment repair practices violate antitrust and consumer protection laws, according to a Bloomberg report citing a filing by Hargrove & Associates, a data processing company that is a third party in the case. The filing said FTC has requested information from Hargrove & Associates, saying it was investigating Deere & Co. to determine if they were using “unfair, deceptive, anticompetitive, collusive, coercive, predatory, exploitative or exclusionary acts or practices” relative to the “repair of agricultural equipment.” Hargrove filed a petition seeking to limit what information it had to provide the FTC, with the company noting that it and the Association of Equipment Manufacturers who they process data for were not targeted in the probe.
USTR opens portal for Section 301 tariff exemption requests on manufacturing machinery... The U.S. Trade Representative (USTR) launched an online portal for companies to request exemptions from Section 301 tariffs levied on China on specific machinery used in domestic manufacturing. Opened on Oct. 15, the portal will accept requests until March 31, 2025. This follows USTR’s earlier exemptions for solar manufacturing equipment and highlights machinery eligible for further exclusions.